PTC) In The Context Of Other Design Software Stocks

PTC Cover Image

Unpacking Q1 Earnings: PTC (NASDAQ:PTC) In The Context Of Other Design Software Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at PTC (NASDAQ:PTC) and its peers.

The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.

The 6 design software stocks we track reported a weaker Q1; on average, revenues were in line with analyst consensus estimates. while next quarter’s revenue guidance was 4% below consensus. Stocks–especially those trading at higher multiples–had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and design software stocks have had a rough stretch, with share prices down 7.3% on average since the previous earnings results.

PTC (NASDAQ:PTC)

Used to design the Airbus A380 and Boeing 787 Dreamliner commercial airplanes, PTC’s (NASDAQ:PTC) software-as-service platform helps engineers and designers create and test products before manufacturing.

PTC reported revenues of $603.1 million, up 11.2% year on year, topping analysts’ expectations by 4.6%. It was a slower quarter for the company, with full-year revenue guidance missing analysts’ expectations.

“In our second fiscal quarter, we again delivered solid results. We have a differentiated strategy that leverages our unique product portfolio to enable our customers with their digital transformation journeys. Our consistent ARR and free cash flow growth continues to highlight the value we are bringing to our customers and the stability of our business model,” said Neil Barua, CEO, PTC.

PTC Total RevenuePTC Total Revenue

PTC Total Revenue

PTC delivered the weakest full-year guidance update of the whole group. The stock is up 0.8% since the results and currently trades at $176.19.

Is now the time to buy PTC? Access our full analysis of the earnings results here, it’s free.

Best Q1: Unity (NYSE:U)

Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.

Unity reported revenues of $460.4 million, down 8% year on year, outperforming analysts’ expectations by 6.2%. It was a solid quarter for the company, with a significant improvement in its gross margin and a narrow beat of analysts’ billings estimates.

Unity Total RevenueUnity Total Revenue

Unity Total Revenue

Unity pulled off the biggest analyst estimates beat among its peers. The stock is down 25.3% since the results and currently trades at $18.05.

Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: ANSYS (NASDAQ:ANSS)

Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.

ANSYS reported revenues of $466.6 million, down 8.4% year on year, falling short of analysts’ expectations by 15.9%. It was a weak quarter for the company, with a decline in its gross margin and a miss of analysts’ average contract value estimates.

ANSYS had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 0.4% since the results and currently trades at $320.

Read our full analysis of ANSYS’s results here.

Procore Technologies (NYSE:PCOR)

Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore Technologies (NYSE:PCOR) offers a software-as-service project, finance and quality management platform for the construction industry.

Procore Technologies reported revenues of $269.4 million, up 26.2% year on year, surpassing analysts’ expectations by 2.5%. It was a weaker quarter for the company, with a miss of analysts’ billings estimates and decelerating customer growth.

Procore Technologies scored the fastest revenue growth and highest full-year guidance raise among its peers. The company added 231 customers to reach a total of 16,598. The stock is down 1.5% since the results and currently trades at $67.24.

Read our full, actionable report on Procore Technologies here, it’s free.

Cadence (NASDAQ:CDNS)

With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.

Cadence reported revenues of $1.01 billion, down 1.2% year on year, falling short of analysts’ expectations by 0.9%. It was a weak quarter for the company, with a miss of analysts’ billings estimates.

The stock is up 3.7% since the results and currently trades at $295.81.

Read our full, actionable report on Cadence here, it’s free.

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